Hansae, Viet Nam

On January 21, 2016, the Fair Labor Association (FLA) accepted for review a Third Party Complaint filed by Cornell University regarding the factory Hansae Vietnam, located in Ho Chi Minh City, Vietnam.  The complaint called for an investigation of issues related to payment of productivity bonuses that resulted in strikes in October and November 2015 in Hansae’s Workshop 5.  FLA-affiliated company Nike is a buyer from the factory.

The FLA engaged the independent assessor Global Standards to conduct an investigation into whether workers had been unfairly denied their bonuses, and into any other violations of the FLA Workplace Code of Conduct that surface during the course of the inquiry.  The FLA investigation found that bonuses in the fall of 2015 were awarded consistent with Hansae company policy, but that serious miscommunications between workers and management (and specifically with a new factory manager hired in September 2015) had created confusion about whether bonuses were actually due. The FLA investigation determined that tensions within the factory had increased due to numerous changes brought about by the new factory manager, including some — such as mandatory worker pat-downs before any bathroom break — that constitute violations of the FLA Workplace Code of Conduct. Workers also reported to Global Standards that:

  • Production targets are set so high that they must work through lunch;
  • Grievance procedures are ineffective; and
  • Exit doors are restricted during lunch, causing delays and possibly safety risks.

Several of the shorter-term remediation steps required by the FLA investigation have already taken place; for example, mandatory pat-downs have ceased and the factory’s grievance policy has been revised. For longer-term remediation, Nike has worked with Hansae to develop a comprehensive plan that works to improve communications systems in the factory, among other steps, such as ensuring that production targets are achievable during regular working hours.